CCI may probe pre-Independence Day heavy discounts by e-commerce giants

The Competition Commission of India (CCI) may order a regulatory probe in pre-Independence Day sale discounts exercise practised by online marketplaces such as Amazon, Flipkart and Paytm.

Discounting practice by online retailers is explicitly banned.

“The issues concerning FDI (foreign direct investment) policy would need to be addressed in the e-commerce policy space to ensure that online market platforms remain a true marketplace providing access to all retailers,” CCI order was quoted by Mint report.

On Wednesday, CCI gave a nod to Walmart-Flipkart deal. It also took the opportunity to denounce the discounting practices and the supplier relationships of Flipkart in its order.

In the last few days, online retailers Amazon, Flipkart and Paytm have come out with various deals offering discounts and cashbacks.

Flipkart is offering new deals and discounts every 8 hours from Aug 10. The e-commerce giant has partnered with Citi Bank credit card for heavier deals. It is offering upto 80 per cent on clothing and footwear.

Amazon sale, which began yesterday, offers up to 50 per cent discount on daily essentials and 50-80 per cent on fashion. It is also offering 50 per cent on books. Exclusive deals and offers are also available for Amazon Prime members.

Besides Amazon and Flipkart, a ‘Freedom Cashback Sale’ has also been announced by Paytm Mall, from August 8 till August 15, for Independence Day. Various cashback offers are also being offered on several appliances. The Mall app will also showcase ethnic apparel and fashion specials from various states.

Five years ago, the ED had investigated many e-commerce firms, including Flipkart, Snapdeal and Myntra, for possible violations of FDI laws. However, no actions were taken against online retailers.

In 2015, CCI had rejected allegations of unfair business practices against five online retail majors – Flipkart, Snapdeal, Amazon, Jabong, and Myntra.

Commerce and Industry Minister Suresh Prabhu had also stated that ED will look into the complaints related to alleged violation of foreign direct investment norms by some e-commerce players.

Last week, CCI had sought views of the DIPP on discounts being offered by e-commerce marketplace platforms.

As per the current FDI policy, 100 per cent overseas investments are allowed in e-commerce marketplace retailing. Domestic e-commerce marketplace platforms having FDI can not directly or indirectly influence the prices.

About Author

Saurabh Singh is a design and graphic lead at Entrackr. Within three weeks of joining, he got motivated to write about emerging Internet economy in the country. Besides design and writing, he is keen observer of social changes triggered by digital channels. Connect with him on social media.